Taheri v Vitek (No 2)

In *Taheri v Vitek (No 2)*, the New South Wales Court of Appeal considered an application to vary an earlier costs order. The dispute concerned the appropriate basis for awarding costs following a substantial compromise in proceedings.

The primary legal issue before the Court of Appeal was whether to vary an existing costs order to reflect a "walk-away" offer made by the respondents. This offer, which involved the respondents foregoing their entitlement to costs, was argued to be a substantial compromise that warranted a shift in the costs order from an ordinary basis to an indemnity basis from a certain date.

The Court of Appeal reasoned that the respondents' offer constituted a significant compromise, demonstrating a willingness to forgo substantial costs to achieve finality. Applying the principles governing costs orders in the context of offers of compromise, the Court found that the respondents' conduct justified a departure from the usual order. The Court concluded that it was appropriate to vary the original order to reflect the respondents' concession.

Accordingly, the Court of Appeal varied the earlier order to stipulate that the appellant pay the respondents' costs of the proceedings on an ordinary basis until 1 May 2014, and on an indemnity basis thereafter. The Court also ordered that the appellant pay the respondents' costs of a specific notice of motion filed on 9 July 2014.